Britannia share price rises post Q3; Nomura, MOFSL, Emkay see more upside

Britannia Industries shares rise after Q3FY26 earnings beat with strong margin expansion. Nomura raises target to ₹7,275; MOFSL, JM Financial, ICICI Securities remain bullish on stock

Britannia Industries delivered a strong set of 2025–26 (FY26) third-quarter (October–December/Q3) numbers, marked by margin expansion and improving volume growth.

 

While the stock had risen over 2.14 per cent intraday and ended 1.12 per cent higher yesterday, it gave up all the gains on Friday in line with overall market weakness. The stock is down 0.6 per cent over the last two days.

 

The initial rally after the results was on account of a better-than-expected performance in Q3FY26, with the company reporting consolidated net revenue growth of 9.5 per cent year-on-year (Y-o-Y) at ₹4,885.2 crore. While October was impacted by goods and services tax (GST)-led trade disruptions, management indicated that demand normalised in November and December. Sales growth during the November–December period stood at 12 per cent, supported by healthy volume expansion.

 

 

Margins were a key positive surprise. Consolidated gross margin expanded 450 basis points (bps) Y-o-Y and 160 bps sequentially to 43.3 per cent. Earnings before interest, tax, depreciation, and amortisation (Ebitda) margin improved 230 bps Y-o-Y and 100 bps quarter-on-quarter to 20.7 per cent. Ebitda rose 22 per cent Y-o-Y to ₹1,028.6 crore, while adjusted net profit increased 23.3 per cent Y-o-Y to ₹718.2 crore, underscoring operating leverage amid stable to benign input costs.

 

The quarter also coincided with significant changes in top management. Rakshit Hargave assumed charge as managing director and chief executive officer from December 15, 2025. Abhishek Sinha was elevated to chief sales transformation officer and Subhashis Basu to chief business officer (dairy) — effective December 2025. Further, Puneet Das was appointed chief marketing officer, while Siddharth Gupta was elevated to vice-president (marketing) — from February 2026.

 

Brokerages believe the rejig could sharpen execution, especially in brand building and distribution expansion.

 

Global brokerage Nomura reiterated its ‘buy’ rating and raised the target price to ₹7,275 from ₹7,000. The brokerage highlighted that after GST rate rationalisation, price parity across players has yet to fully stabilise, with some national brands still operating at ₹4.5 and ₹9 price points. This dynamic incentivises retailers and exerts pressure on volumes for players, including Britannia, that have reverted to ₹5 and ₹10 price points with higher grammage — around 65 per cent of its portfolio falls within this bracket. However, Nomura expects remaining players to transition to price parity in the fourth quarter (January–March/Q4) of FY26, which could support an acceleration in volume growth to high single digits. It raised its earnings per share (EPS) estimates for FY26, 2026–27, and 2027–28 (FY28) by 3.5 per cent, 1.5 per cent, and 1 per cent, respectively, and projects an 11 per cent EPS compound annual growth rate (CAGR) over FY26–28.

 

Motilal Oswal Financial Services maintained a ‘buy’ rating with a target of ₹7,150, raising its EPS estimates by 2–3 per cent for FY26–28. It models a 12 per cent revenue CAGR and a 14 per cent profit after tax CAGR over the period, citing improving consumption drivers, continued distribution expansion, product innovation, and sustained brand investments.

 

JM Financial Institutional Securities also retained a ‘buy’ call, marginally raising its target to ₹7,000. It expects revenue momentum to improve gradually as pricing in low-unit packs stabilises across the industry. Stable input costs could enable higher brand investments while sustaining high-teen margins. The pace of volume recovery and the potential impact of a reduction in fiscal incentives remain key monitorables.

 

Emkay Global Financial Services maintained an ‘add’ rating with a target of ₹6,650, noting management’s focus on adjacent categories and e-commerce. ICICI Securities, which raised its target price to ₹6,800, highlighted that adjacencies such as cakes, rusks, wafers, and croissants delivered double-digit growth in Q3, with e-commerce contribution nearly 3x that of biscuits.

 

In dairy, ghee, milk drinks, and dairy whiteners outperformed, though cheese growth was marginal.

 

Overall, brokerages remain constructive, citing margin resilience, improving volumes, and sharper brand focus as key drivers. However, volatility in raw material prices and heightened competition from regional players remain downside risks.